$57,000 to $0 — How This Software Engineer Eliminated Her Debt

Woman managing the debt.
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When Carmen Perez enrolled at the University of South Florida, she wasn’t expecting it to lead to the legal battle of her life. But thanks to a seemingly minor paperwork issue, that is exactly what happened. The result? Not only did she have a mountain of student loan debt to repay, but she also had to deal with a lawsuit that would drag on for a year and a half.

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One of Carmen’s student loans allowed her to defer payments, but only if she was still attending school. When she was a junior, she started receiving notices asking her to provide proof that she was currently enrolled. But she didn’t think much of it because she had already provided what she felt was sufficient proof.

In 2009, Carmen graduated with a B.S. in finance. After graduating, things were seemingly going quite well for Carmen. She worked at various Wall Street firms, including an internship at Goldman Sachs and a job at Morgan Stanley. However, there was a dark side most couldn’t see. Despite her finance background, she wasn’t saving any money, had credit card debt and even used payday loans. All of this added up to around $57,000 in debt.

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Then, in 2016, she decided to get her finances in order. She put herself on a strict budget and picked up a side hustle in photography. She was going to knock out that debt and take control, and things were going well initially.

Then, three months into her debt payoff, she received a notice that she was being sued.

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As it turns out, those notices she was receiving did mean something, and now a lawsuit was being brought against her. And that wasn’t good. Remember, it was just three months earlier that she decided to turn her finances around. She wasn’t prepared for this. Still, she wouldn’t admit defeat.

Instead, she lawyered up and unleashed an all-out attack on her debt. Every last penny she could muster went into paying off that student loan. That included bonuses, tax returns and money that otherwise would have been invested. She even cut her expenses down as much as possible by getting rid of cable and limiting her spending. With the help of her lawyer — and her sense of determination — she managed to pay the student loan off in a year and a half.

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Once the lawsuit was done, she switched gears to paying off the rest of her debt — an auto loan, medical debt, credit cards and so on. By 2018, she was debt-free. In 2019, she paid cash for a wedding and purchased a home. Finally, Carmen started saving as much money as she could muster so she could change careers from finance to tech.

Of course, she would also need some marketable skills to help her switch gears. So she started teaching herself how to code on nights and weekends. Eventually, she was able to save up enough to be able to quit her job in finance. Then, she attended a coding boot camp, which was thankfully free of charge.

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Carmen then began working at a startup as a software engineer but was unfortunately laid off in May 2020 due to a lack of funding. She then found a job at another startup, a fintech that specializes in anti-money laundering software. In a way, things came full circle as she worked in this same space in the finance industry. Now, she’s making the same income working for the fintech startup that she made in finance.

Make Your Money Work for You

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There is no real secret to how Carmen paid off her debt. She was faced with an enormous challenge but refused to give up. She buckled down and reduced her spending as much as possible. She picked up a side hustle, and she put every last penny she could manage into attacking her debt. But being hit with a lawsuit in the midst of everything was a twist not everyone could have handled. Carmen persisted and is now helping others get their finances in order, too.

While there is no secret or magic, that means that what Carmen did is reproducible. She increased her income as much as possible and decreased her spending as much as possible. The only “tricks” she used was putting any extra money, such as bonuses and tax refunds toward her debt. If she can do it, so, too, can you. 

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Last updated: June 30, 2021

About the Author

Bob Haegele is a personal finance writer who specializes in topics such as investing, banking, credit cards, and real estate. His work has been featured on The Ladders, The Good Men Project, and Small Biz Daily. He also co-runs Modest Money and is a dog sitter and walker.

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